Total returns from the assets are about 10% so far this year, according to a US leveraged loan index, and the average price of a leveraged loan in the secondary market is a bit less than 96 cents on the dollar, the highest since May 2022 after inflation exceeded expectations.
Debt sales launching against this backdrop are finding hungry investors. Restaurant Brands International Inc., which owns fast-food chains including Burger King and Popeyes, sold a $5.175 billion loan this week. For now, demand will probably stay strong for the rest of the year, said Frank Ossino, a portfolio manager at Newfleet Asset Management, citing the supportive economy and high loan coupons.Banks are increasingly muscling in on the $1.5 trillion private credit market in a move that further blurs the lines between private-lending funds and their traditional banking rivals.
Chinese developer Country Garden Holdings Co. left investors grasping for more information after it again delayed a deadline for voting on its request to extend a bond. Wall Street bankers are dangling one of the steepest discounts in recent memory to bond investors as they look to offload billions of dollars of debt that’s been stuck on their books for months.
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